The Advance Estimate for Q1 GDP came in at 2.2%, down from 3.0% in the previous quarter, and below most mainstream media estimates of 2.5%.

However, my friend BC notes ....

The GDP deflator is reported to have averaged 1.2% annualized in the past 2 qtrs. Had the trend rate from '11 persisted, the deflator would have subtracted 2.6% annualized from real GDP, resulting in a 2-qtr. growth of real GDP of 0%.

ECRI's Achuthan would appear correct that a recession were imminent instead of looking like a dummy.

In their "advanced" estimate of the first quarter 2012 GDP, the Bureau of Economic Analysis (BEA) found that the annualized rate of U.S. domestic economic growth was 2.20%, down more than three-quarters of a percent from the fourth quarter of 2011. The vast bulk of the downturn was in commercial activities, with both fixed investments and inventories lowering the headline number substantially. Consumer spending on both goods and services improved slightly, and the ongoing contraction in governmental spending moderated somewhat. The BEA's bottom-line "real final sales" improved about a half-percent to an annualized growth rate of 1.61% -- hardly robust and certainly not the kind of numbers we would expect to see nearly three years into a recovery.

Once again the BEA has used "deflaters" that will strain the credibility of the public, especially if they buy gasoline. To correct the "nominal" data into "real" numbers the BEA assumed that the annualized inflation rate during 1Q-2012 was 1.54%. As a reminder, lower "deflaters" cause the reported "real" growth rates to increase -- and once again very low seasonally adjusted BEA inflation "deflaters" have been the headline number's best friend. If the raw "nominal" numbers were instead "deflated" by using the seasonally corrected CPI-U calculated by the Bureau of Labor Statistics (BLS) for the same time period, nearly the entire headline growth rate vanishes -- and the resulting growth rate would have been a minuscule 0.08% with "real final sales" contracting.

And real per capita disposable income actually shrank during the quarter shrank at an annualized -0.27% rate (from $32,699 per capita to $32,677 per capita) -- and it remains lower than it was 5 quarters ago. -- even using the BEA's optimistic "deflaters." Real-world households likely felt the pinch even more.

Take a good look at the last decade. The US only managed 1.7% growth in the biggest housing boom in history followed by the biggest multi-trillion dollar global stimulus effort in world history.

Three years into a recovery, growth (if you believe preposterous deflators) is a mere 2.2% but only 0% if you don't. Moreover, with parts of Europe in an outright depression, with even Germany and the UK in recession, and with China slowing significantly, the odds the US economy decouples for too much longer is now approaching zero.

Presented without much commentary, because little is necessary: the only ratio that matters for the US economy, the change in US public debt ($359.1 billion) and US GDP ($142.4) in the first quarter, hit 2.52x and rising.

If everybody won't mind spreading this FACT. The numbers are being fudged.. BIG TIME. Inflation and Unemployment. When and if the Republicans take over look for a huge spike in those numbers.

We as conservatives need to flood the news fax and email accounts with this propaganda war that the libs are going to use to derail the tax cuts and government parasite cutting that needs to be done in the next administration.

We need to stand firm and elect conservative legislative members to oppose Obama or Obama's brother by another mother- Romney. ugh...

This is the game and spread it around. Let Rush, Cavuto and Stossel know. At least they have a big enough audience that when the big lie is released we have it on record.

I don't believe ANYTHING our government releases as far as labor and economic statistics is concerned and very little of anything else while the quisling marxists run the asylum.

I'm reminded of when Pataki became governor of NY. During a press conference either immediately after the election or his inauguration, he was informed (by a Cuomo communique) of the TRUE budget deficit of the state. At first he thought they said “$4 million” to which he replied, “We can handle that.” When he was then informed that it was “$400 million”, his eyes bugged and you could hear him go “GULP!”

... I don't believe ANYTHING our government releases as far as labor and economic statistics is concerned and very little of anything else while the quisling marxists run the asylum.

It's important to remember that the 'fudging' of employment and inflation numbers is the cumulative result of 'enhancements' that occurred under both D's and R's. The CPI has morphed from measuring the cost of maintaining a set standard of living to maintaining a declining standard of living.

GDP mismeaures the economy by pretending that all government spending is beneficial. It doesn’t account for the crowding out of private investment or the misallocation of capital. It’s really a very poor measurement of any economy.

Your 30-35% number might be true if you are counting total transactions rather than final value. If a farmer sells grain to a baker for $100 who sells bread to a store for $200 which the sells it to consumers for $300, there have been a total of $600 of transactions for only $300 of production. If the grocery owned the farm and bakery the first two transactions would never be counted, but the total production in loaves of bread and final sales would be the same final $300.

20
posted on 04/29/2012 7:34:23 AM PDT
by KarlInOhio
(You only have three billion heartbeats in a lifetime.How many does the government claim as its own?)

Your 30-35% number might be true if you are counting total transactions rather than final value.

I am.

If a farmer sells grain to a baker for $100 who sells bread to a store for $200 which the sells it to consumers for $300, there have been a total of $600 of transactions for only $300 of production.

That's correct -- and it is the classic example.

If the grocery owned the farm and bakery the first two transactions would never be counted, but the total production in loaves of bread and final sales would be the same final $300.

Yes and that is a plausible scenario. Nonetheless, the grocery company would still pay for utilities, fertilizer, energy, seed, milling equipment, etc.. Those expenditures are not counted in the current GDP equation.

My point is that 70% of the U.S. economy does not consist in and is not dependent on consumer spending. That shibboleth has led to the misconception that the U.S. has a consumption economy.

It most certainly doesn't. It is a production and consumption economy. In fact production expenditures are usually slightly higher than consumption expenditures (a concept the Keynesians claim is impossible.)

If GDP merely represents the wealth created (final value) in the U.S. then it cannot at the same time be said to accurately reflect the composition of spending in the country. This exaggerated emphasis on consumer spending justifies all sorts of political mischief and makes it much more difficult to understand what sectors of the economy are in trouble.

As we are seeing, consumer spending now exceeds pre-recession levels but obviously all is not well. Another concept the Keynesians don't understand. They developed the GDP equation and the system of national accounts by the way.

21
posted on 04/29/2012 1:36:56 PM PDT
by BfloGuy
(The final outcome of the credit expansion is general impoverishment.)

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